For the past few years, there has been a steady lack of gas supplies. Nevertheless, in order to serve a few additional customers, gas pipelines were expanded to Rajshahi and Khulna.
Despite much uncertainty regarding gas availability, a new pipeline is being erected to serve Rangpur with gas.
While the gas transmission authority, Gas Transmission Company Limited (GTCL), is having difficulty making up for the significant losses from the pipeline installation projects, the projects are purportedly being carried out to fulfil political commitments.
The GTCL sources state that it manages 75% of the nation’s total gas supply and that its only income comes from gas transmission fees. Revenue and supply are correlated.
With a daily gas transmission capacity of 5 billion cubic feet but an actual daily supply volume of just 2 billion cubic feet, more over half of GTCL’s supply capacity is idle. Thus, during the previous administration, the gas transmission firm became a losing enterprise due to the arbitrary installation of new pipelines.
The government and other lenders contributed to the pipeline installation costs, which were also covered by the GTCL’s own funds. It has been experiencing financial difficulties lately and finding it difficult to make loan payments, according to several officials.
On December 4, 1993, GTCL started operating with a 544-kilometer gas transmission line. By the end of the 2022–2023 fiscal year, it had grown to 2,167 km.
The business reported a Tk 740 million profit during the 2020–21 fiscal year, but in the 2021–22 fiscal year, it suffered a Tk 2.17 billion loss. Its gas transmission volume dropped by 11% in the 2022–2023 fiscal year, resulting in a Tk 12.12 billion loss for the company.
The managing director of the GTCL, Rukhsana Nazma Ishaq, stated in the FY23 annual report that project capitalization is driving up interest expenses. Conversely, significant degradation and the addition of system losses are increasing the overall loss amount.
To bring gas to the south-west region, two transmission lines were erected at a cost of Tk 15 billion, one from Hatikumrul to Bheramara and the other from Bheramara to Khulna. In order to supply gas to customers, the Sundarban Gas Company later built additional distribution pipelines.
With no guarantee on the gas supply, the government are currently building an 800 MW gas-powered power plant in Khulna, with construction nearing completion.
No gas delivery for 15 years to Khulna
Founded in 2009, the Sundarban Gas Company provides services to the regions of Khulna, Barishal, and sections of Dhaka. Between 2012–13 and the previous year, the company provided gas connections to 2,393 entities, including 2,376 residential ones, over its 144 km distribution network.
In the previous eleven years, they had only offered eight industrial connections. All connections have been established in Bhola, with the exception of three factories in Kushtia; Khulna and Barishal are not served.
According to insiders, industrial connections are only permitted with specific considerations, while household gas hookups have been discontinued for nearly ten years. A lack of gas is causing industries to struggle, but new pipelines are being built in the name of economic growth.
Zanendra Nath Sarker, the chairman of Petrobangla, acknowledged that gas pipes are underutilized but pointed out that these pipeline projects were started many years ago in an interview with Prothom Alo. Although it was planned, there was no rise in gas production. Drilling more wells might have increased output, which would have improved the supply of gas.
Bad plans and poor investments
The nation consumes 3.80 billion cubic feet of gas per day, compared to a supply volume of 3 to 3.1 billion cubic feet. Of this, 1.10 billion cubic feet are imported as liquefied natural gas (LNG), and the remaining 2 billion cubic feet are obtained from indigenous sources.
Since it is unlikely that domestic output will rise very soon, the previous administration planned to expand LNG imports. They took the initiative to sign contracts for the development of new terminals in addition to imports.
The building of the Payra-Barisal-Gopalganj pipeline is one of the new projects, with an estimated cost of Tk 60 billion. It is meant to feed gas from the LNG terminal at Payra, which is currently under development.
Additionally, it is estimated that the Jajira-Tekerhat-Gopalganj pipeline, which connects Langalband in Narayanganj to Mawa, will cost Tk 23.60 billion. These projects are being reexamined by the interim administration.
According to M Tamim, the chief advisor’s special assistant for energy, there has been a persistent gas shortage ever since pipelines were installed in Khulna and Rajshahi, Prothom Alo was informed. The projects were motivated by political factors. These are sick initiatives and poor investments. The pipelines were not built to meet actual energy requirements, but rather to fulfill political promises.
